Industry Concentration Research Articles

Air quality monitoring system based on low power wide area network technology at public transport stops

<span>Mass migration from rural areas to urban areas has caused problems of traffic congestion, high industrial concentration and inequity in the distribution of housing in the world's capitals, generating a significant threat to sustainable development and public health due to air pollution air. In the Peruvian context, the importance of real-time monitoring of air quality is highlighted according to the standards established by the government. Several studies propose real-time environmental monitoring systems using internet of thing (IoT) technologies, electrochemical and optical sensors to measure pollutants, highlighting the need for data analysis. The objective of the paper is to show the implementation of IoT devices called sensor nodes, with long range wide area network (LoRaWAN) transmission technology for continuous monitoring of polluting gas concentrations. In addition, they are integrated into a central node called gateway to perform real-time monitoring through a web application. As an initial result, IoT devices demonstrated their effectiveness for real-time monitoring. Despite being a prototype-level result, the next stage involves its deployment at public transport stops in Lima. Overcoming the limitations of the solution, this paper establishes the foundation for future research on pollution and public health.</span>

How Informed Are International Short Sellers? Global and Local Industry Concentration of Short Sellers

How Informed Are International Short Sellers? Global and Local Industry Concentration of Short Sellers

Innovation Concentration and Patent Market Structure

Two empirical facts concerning the increase in innovation concentration levels of U.S. industries over the last two decades have been established: innovating firms with larger market shares invest more in R&D and enter into more industries. This paper presents a model of an imperfectly competitive patent market with heterogeneous firms to show that R&D itself increases industry concentration. In the context of an imperfectly competitive patent market structure, firms generate endogenous variable markups. In particular, the price of firms' newly invented knowledge, the profit and survival rate of the innovating firms depend on the market share of the knowledge stock. Firms pay a random fixed cost in each period which together with market share determine the decision on whether to innovate in different sectors. Firms enter different sectors sequentially: they start developing new varieties in a sector with minimal competition, building up private knowledge, and then venturing into other sectors using R&D investment and accumulated knowledge. Finally, we prove that the stationary firm innovation size distribution exhibits a Pareto tail in the steady state.

The Role of Environmental Audits in Enhancing Sustainability in Industrial Property Management. Insights From Nairobi County

Nairobi, the capital city of Kenya, is experiencing significant environmental challenges, with pollution levels reaching unprecedented heights. This issue is particularly evident in the Nairobi River Basin, which comprises the Nairobi, Ngong, and Mathare Rivers. The basin is a focal point of concern due to the widespread discharge of untreated industrial waste into its waters. The city's high population density, coupled with the concentration of industries, exacerbates the environmental impact, making Nairobi the most affected region in the country in terms of pollution. Among the various sources, industrial pollution emerges as a major contributor, prompting the National Environmental Management Authority (NEMA) to intervene and hold accountable the industries responsible for these environmental violations. This study set out to analyze the role of environmental audits in the management of industrial properties, focusing on a case study of industrial properties in Nairobi. The research targeted three key industrial areas: Nairobi Industrial Area, Baba Ndogo, and the industries along Nairobi-Mombasa Road. The study's target population consisted of 487 respondents, comprising 440 property managers and 47 NEMA County directors. Using Yamane’s 1967 formula, the sample size was determined to be 211 respondents. The study employed a simple random sampling method for data collection, utilizing questionnaires and interviews to gather information. Data analysis was conducted using descriptive statistics with SPSS version 24, and interpretation was guided by a theoretical framework and previous research. The study found that environmental audits significantly enhance industrial performance by improving organizational effectiveness, ensuring regulatory compliance, and boosting competitive advantage. They also raise awareness of environmental impacts, enhance corporate reputation, and provide valuable data for investors. However, challenges such as corruption, regulatory bias, and high audit costs persist. The research underscores the importance of environmental management and recommends that property managers strategically implement audit systems to support sustainable industrial growth and regulatory compliance

Towards a Low-Carbon Target: How the High-Speed Rail and Its Expansion Affects Industrial Concentration and Macroeconomic Conditions: Evidence from Chinese Urban Agglomerations

High-speed rail is a high-standard railway system, which allows trains to operate at high speed. The railway play a crucial role in connecting urban agglomerations, which represents the highest form of spatial organization in the mature stage of urban development, bringing together cities of various natures, types, and scales in specific regions. This paper explores the impacts of high-speed rail and its expansion on industrial concentration and macroeconomic conditions in the period of 2000 to 2019. We use a well-known transportation policy as a natural experiment, utilizing geographic distance data to study the effects of high-speed rail and its expansion on industrial concentration and macroeconomic conditions in urban agglomerations. The results show that high-speed rail increases industrial concentration but leads to a reduction in macroeconomic conditions. Unlike previous studies in this field, we use distance variables to analyze how the expansion of high-speed rail affects macroeconomic conditions and industrial concentration through location advantages. The impacts of high-speed rails vary across urban and non-urban agglomeration cities, resource-based and non-resource-based cities, large and small cities, and eastern, central, and western regions. Our results are robust to the shocks from the global financial crisis, time lags, different distance dummy variables, dependent variables, and endogeneity issues. This study regards the opening up of high-speed rail as both improving air quality and reducing carbon emissions through substituting for urban and aviation transport. Compared to traditional transport methods such as urban and air travel, the efficiency and environmental benefits of high-speed rail make it an important method for reducing greenhouse gas emissions. Consequently, the expansion of high-speed rail could support both economic development and environmental concerns, and it is playing a crucial role in transportation selection for advancing low-carbon economic goals.

Characteristics and risk assessments of mercury pollution in a county region undergoing industrialization in northeastern China: a case study in Gongzhuling

Mercury pollution in emerging industrial zones and surrounding areas, especially in industrial concentration areas, has attracted much attention. So as to clarify the characteristics of Hg in the environment in China’s small and medium-sized industrial emerging and surrounding areas, central urban area of Gongzhuling, a traditional agricultural town with a high degree of industrialization in northeast Changchun industrial base, is taken as the scope. Geological accumulation trin (Igeo) was used to study the degree of soil mercury contamination in Gongzhuling area, latent Er (ecological risk) trin was used to appraise the Er of soil Hg in the study area, and non-carcinogenic risk assessment of mercury in soil using human exposure risk assessment model. The results showed that 34% of soil samples had higher Hg content than the background value of the province’s soil (0.04 mg kg−1). The Igeo results showed that Hg pollution rate of soil in study area was 9% (index >0). In conclusion, the level of soil Hg pollution in Gongzhuling area was low, and the pollution area is mainly concentrated in the northwestern part of the study range. The highest and lowest Er values of soil Hg from the study sample were 2.23 and 214.83, and 24% of the samples had Er > 40, that means they pose a moderate or higher potential ecological risk, and most of these points are located in the northeast of the study range. The main route of human exposure to Hg is oral ingestion. The HQ (non-carcinogenic risk index) and HI (total non-carcinogenic risk value) of soil mercury were both much less than 1, it indicates that the present level of soil Hg in the study range does not pose a threat to local adult health for the time being. This study provides reference for other urban pollution risk assessment, and further defines the direction of future work.

Capital Investment, Equity Returns, and Aggregate Dynamics in Oligopolistic Production Economies

Abstract We analyze effects of tacit collusion in a dynamic general equilibrium model of oligopolistic sectors with capital investment and real frictions. Through their effects on equilibrium- and off- equilibrium stock prices, fundamental shocks affect incentives for defection from tacit collusion, amplifying the interaction between the real economy and financial markets as well as firms‘ risk exposure. The model implies ambiguous relationship between industry concentration and equity returns depending on operating leverage, which helps reconcile conflicting evidence in the literature. We find quantitative and empirical support for novel theoretical predictions regarding the effects of concentration on returns and investment. (JEL G12, G31, D43)

Trends and possible nexus between profit efficiency and market concentration in Indian leather industry: a panel frontier analysis of major Indian leather-manufacturing states

Trends and possible nexus between profit efficiency and market concentration in Indian leather industry: a panel frontier analysis of major Indian leather-manufacturing states

The Failure of Silicon Valley Bank: A Test of Market Efficiency

The unexpected collapse of Silicon Valley Bank (SVB) on March 10, 2023, sent shockwaves through the tech industry. SVB, a long-standing financial institution serving tech startups for nearly four decades, suddenly shifted from solvency to insolvency within 48 hours, marking the second-largest bank failure in U.S. history. This event provides an excellent opportunity to test the Efficient Market Hypothesis (EMH), particularly its semi-strong form, which posits that rapid information absorption prevents significant stock price gains in response to new information. This research uses the standard event study methodology in the finance literature to investigate SVB’s collapse and its impact on the stock prices of 30 banks traded on the New York Stock Exchange. The study aims to discern whether stock returns exhibited reactions prior to, on, or after the public announcement of SVB’s failure, thereby assessing market efficiency. Using historical stock and S&P 500 index data, the study analyzes holding period returns, performs regression analyses for pre-event periods, and calculates average excess returns. Results indicate statistically significant negative impacts on stock prices surrounding and on the event date. Furthermore, consistent with behavioral finance theory, a decline in adjusted stock prices approximately 7 days before the event suggests anticipatory market behavior, in line with semi-strong market efficiency. SVB’s case emphasizes the role of external factors, regulatory changes, and industry concentrations in shaping market responses. This research contributes empirical evidence to the discourse on market efficiency, highlighting the need for a nuanced understanding of market behaviors during crises. Lessons from SVB’s collapse will inform regulatory and risk management strategies, impacting future discussions on market efficiency. Likewise, the study results support the semi-strong form efficient market hypothesis and suggest the possibility of trading on this information up to 7 days prior to the announcement consistent with the behavioral finance literature (Bacon & Howell 2021). This study provides valuable insights into market dynamics during unprecedented events, influencing future discussions on regulation, risk management, and market efficiency.

Competition in the African air transport market

The air transport market in Africa is regulated and viable for designated carriers. Although there are some sub-regional liberalizations, airlines primarily compete based on the specifications of bilateral air service agreements. However, this competitive landscape has not been thoroughly investigated. This study examines market concentration in the African aviation industry and explores its impact on the output of African airlines. The competition was measured at the airport level using the Herfindahl-Hirschman index. Panel data were drawn from 54 countries, 339 airports, and 221 airline groups for the period 2015–2019. Kernel density estimation shows that the region’s market for air transport services is fragmented, with many small airlines. Strong competition is more prevalent at larger hub airports, airports near tourist destinations, and major airports far from larger African hubs, while markets tend to be concentrated where dominant and protected flag carriers operate. Competition is also low or limited at smaller airports offering limited flights. The results of panel regression analysis reveal a nonlinear relationship between market concentration and airline output, as strong competition may limit airlines’ output, and high concentration may promote a dominant airline or alliance that may hinder other airlines from entering or remaining in the market.

Does corporate sustainability performance matter for cash holdings? International evidence

PurposeWe examine the impact of corporate sustainability performance (CSP) on corporate cash holdings, focusing on the moderating impacts of industry’s concentration, financial constraints, and institutional environments.Design/methodology/approachThe empirical analysis is conducted on a sample of 31 countries from 2002 to 2018. We use the pooled OLS regressions controlling for fixed effects. We further address endogeneity issues using an instrumental variable approach, the Difference-in-Differences regression based on an exogenous shock, and the propensity score matching.FindingsWe find that firms with superior CSP hold more cash. This result is valid after a series of tests for robustness and endogeneity issues, suggesting a causal effect of CSP on corporate cash holdings. In the cross section, the positive impact of CSP on cash holdings is more pronounced for firms operating in highly concentrated industries, but attenuated for firms with financial constraints and for those operating in countries with better institutional environments. We further show that CSP affects cash holdings through the channel of financial distress risk.Practical implicationsIn making investment decisions, investors should not only examine corporate financial performance and sustainability profile, but also understand the related cash holding levels and financial distress costs. Corporate managers making decisions on levels of cash holdings should pay more attention to their sustainability behavior, especially for firms operating in concentrated industries and/or facing financial constraints. Governments and authorities can apply regulations to encourage firms to engage more in sustainable activities, as well as establish good institutional environments in the country.Originality/valueUsing a comprehensive international dataset, our paper contributes to two strands of literature: the economic impact of CSP and the driver of cash holdings. We further focus on the moderating role of industry concentration and firms’ financial constraints. Our international sample also allows us to exploit the effect of country-level informal institutions.

Capital Adequacy and Bank Profitability: the Moderating Effect of Macroeconomic Variables

Based on earlier research, two primary categories of characteristics influence bank profitability. First, each bank has a unique set of profitability drivers that are often the direct outcome of management choices (quality, size, capitalization, efficiency, asset structure, and revenue divergence). The second group of determinants consists of elements like industry concentration, economic growth, inflation, and interest rates related to the profitability of the industry formation and the macroeconomic environment in which the banking system conducts. Capital adequacy may be defined as the ratio of the institution’s main capital to its assets, including loans and investments, to gauge a financial institution’s stability and strength. This paper examines the correlation between capital adequacy and banks’ profitability through the moderating impact of macroeconomic variables like inflation, interest rates, and exchange rates in the banking sectors of Malaysia, Indonesia, and Turkey. To this end, panel data were gathered from the OIC statistics database concerning 2010 and 2021. The study’s regression analysis exposed that although inflation has a significant negative influence on banks’ profitability, while the capital adequacy ratio, exchange rate, and interest rate have positive and significant impacts. Regarding the moderating effect, both inflation and interest rates have a significant positive and negative impact on the relationship between banks’ profitability and capital adequacy, respectively. Additionally, macroeconomic variable interactions with capital adequacy are not statistically significant.

Geographic industry concentration and asymmetric cost behavior

AbstractThis research diverges from the existing literature on cost stickiness by examining the relationship between a firm's geographic proximity to industry peers, termed industry co‐location, and its asymmetrical cost behavior. We propose that managerial decisions regarding resource adjustment are influenced by the state of resource markets in the firm's vicinity, hypothesizing that a high concentration of industry peers triggers downward asset price spirals during simultaneous resource liquidation. Additionally, we anticipate that industry‐wide demand exceeding fixed capacity exacerbates congestion costs, thereby diminishing bargaining power in local resource markets. We predict that heightened resource adjustment costs linked to industry co‐location discourage managers from reducing capacity commitments, thereby increasing cost stickiness. Our findings support this prediction, demonstrating a positive association between industry co‐location and cost stickiness. Moreover, we observe that cost stickiness intensifies when closely located industry peers experience declines in sales. This paper provides initial evidence illuminating the impact of industry co‐location on cost stickiness and suggests managerial implications to prevent costlier capacity adjustment through local resource markets.

Employee satisfaction and digital transformation: Evidence from China’s Top 100 Best Employers list

Using a sample of Shanghai and Shenzhen A-share listed enterprises from 2011 to 2020, this study measures listed enterprises’ employee satisfaction according to whether they were included in China’s Top 100 Best Employers (Top 100) list to investigate the impact of employee satisfaction on enterprises’ digital transformation. The study determines that enterprises on the Top 100 list with high employee satisfaction are correlated with driving digital transformation. This conclusion remains valid after considering endogeneity and conducting various robustness tests, supporting the stakeholder theory hypothesis. Mechanism tests demonstrate that employee satisfaction promotes enterprise digital transformation through three mechanism channels of human capital agglomeration, technological innovation, and mitigation of managerial myopia. The heterogeneity analysis reveals that employee satisfaction promotes enterprises’ digital transformation more significantly in non-state-owned enterprises, enterprises with high industry concentration, and those with high research and development intensity. Furthermore, enterprises with higher employee satisfaction exhibit better financial status, which improves innovation efficiency, increases income, and promotes scale expansion.

Market concentration and productivity: evidence from the UK

AbstractWe measure product market concentration and business dynamism in the UK from 1997 to 2020 and study the relationship with productivity. Our results show that concentration in the UK is increasing among narrow industries on average, but for a broad market definition, concentration and business dynamism are stable. We find a negative relationship between concentration and productivity for the average firm, but a positive relationship for the average worker. This occurs because higher industry concentration is associated with better allocative efficiency, measured by the proportion of workers in higher‐productivity firms.

Peer effects, industry concentration and capital structure: evidence from emerging market economies

ABSTRACT This study investigates the relationship between peer effects and corporate capital structure with the intervening effect of industry concentration. The methodology involves instrumental variable approach in the regression results from OLS and two-stage least squares (2SLS) with fixed effects. Empirical evidence shows that peers’ leverage decisions are significant determinant for a firm’s leverage decisions. Moreover, peers matter more when firms are operating in the competitive environments and same is not true for firms belonging to concentrated environment. These findings imply that the financial policymakers may device customized policies for competitive and concentrated markets to restrict the downside risk of debt financing.

Disclosure Regulation and Price Informativeness: Evidence from Industry-Information Disclosure Guidelines in China

We examine whether China’s industry-information disclosure guidelines (IIDGs) improve firms’ stock price informativeness and the quality of their textual disclosure. Employing a stacked difference-in-differences design, we find that applicable firms respond to IIDG implementation by including additional IIDG-related and firm-specific information in the Management Discussion and Analysis (MD&A). Our results also show that the stock market reacts to the enhanced disclosure and incorporates more firm-specific (rather than market-wide or industry-level) information into the stock price, as evidenced by a decrease in stock return synchronicity. Further analyses show that firms with fewer increases in textual disclosure following IIDG implementation are more likely to receive disclosure-related comment letters. Additionally, the extent to which firms change their textual disclosure varies with the industry concentration and firms’ profit margins due to the proprietary costs of disclosure.

Investment efficiency, ESG performance and corporate performance: evidence from Chinese listed enterprises

Purpose This study aims to propose a moderated mediation model to investigate the moderating effects of environmental, social and governance (ESG) performance on the relationship between inefficient investment and firm performance and the mediating effect of firms that participate in institutional research on the relationship between investment efficiency and performance. This study also analyses the heterogeneity of the corporate nature, intensity of industrial research and development (R&D), industrial competition and regional marketization. Design/methodology/approach This study uses a panel data fixed-effects model to conduct a regression analysis of 1,918 Chinese listed firms from 2016 to 2020. A Fisher’s permutation test is used to examine the differences between state-owned and nonstate-owned firms. Findings Inefficient investment negatively impacts corporate performance and higher ESG performance exacerbates this effect by attracting more institutional research which reveals more problems. State-owned enterprises perform significantly better than nonstate-owned enterprises in terms of ESG transformation. Industrial R&D intensity, competition and regional marketization also mitigate the negative effects of inefficient investment on corporate performance. Practical implications This study suggests that companies should consider inefficient investments that arise from agency issues in corporate ESG transformation. In addition, state-owned enterprises in ESG transformation should take the lead to achieve sustainable development more efficiently. China should balance regional marketization, encourage enterprises to increase R&D intensity, reduce industry concentration, encourage healthy competition and prevent market monopolies. Originality/value This study combines the agency and stakeholder theories to reveal how inefficient investments that arise from agency issues inhibit value creation in ESG initiatives.

Antitrust regulation, innovation and industry dynamics

This paper presents a framework for identifying the impacts of antitrust regulation on innovation and industry dynamics. I consider two inventor types: multi-product incumbent firms and startups not yet in product markets. They pursue external innovation, which results in Schumpeterian competition; and internal innovation, which incumbent firms use to refine current products in their portfolios. I find that weaker regulation gives incumbent firms greater market power to block competition, reducing incentives for external innovation, but raising incentives for internal innovation. Less heavy-handed regulation slows industry dynamics and raises industrial concentration; however, more lenient regulation may increase aggregate innovation depending on parameter value.

The Formation Conditions of the Volga Basin Oil Shales in Relation to Their Metallogeny on Rhenium and Other Valuable Elements

The Volga oil shales are located on the Russian platform and represent a potential non-traditional and promising source of rhenium and other valuable metals. Concentrations of rhenium at the level of industrial types of ores have been identified at the Perelyubskoe and Kotsebinskoe deposits. The complex of lithological and geochemical studies suggests that the metallogeny of the Volga oil shales is associated with the influence of volcanism and anoxic conditions during the sedimentation period. The main criteria have been identified by which high concentrations of rhenium in the Volga oil shales can be predicted: the content of organic carbon, molybdenum, and the DOPr indicator. Based on the analyzed data, promising layers have been identified for the Perelyubskoe and Kotsebinskoe deposits to detect industrial concentrations of rhenium.